Pound Halts Four-Day Advance Before BOE Meeting Minutes

22
Oct

Forex Trading Floors brings news on the Pound from Bloomberg.

The pound halted a four-day advance against the euro before minutes of the Bank of England’s October meeting that will add to evidence of officials’ thinking on the timing of their first interest-rate increase since 2007.

Analysts from Bank of America Corp. to Societe Generale SA have changed their forecasts for when the BOE’s Monetary Policy Committee will raise borrowing costs from a record-low 0.25 percent after data last week showed inflation dropped to the slowest in five years in September. Forward contracts based on the sterling overnight interbank average, or Sonia, showed investors have pushed back bets on a 25 basis-point increase in borrowing costs to September, from February just two months ago.

“We’ll be looking in the minutes to see if the MPC has shifted their view towards a dovish outlook for policy,” said Lee Hardman, a currency strategist at Bank of Tokyo-Mitsubishi UFJ Ltd. in London. “The minutes may highlight some more concern over downside risks to growth given the weaker external demand outlook. Inflation as well has obviously disappointed.”

Sterling weakened 0.2 percent to 79.09 pence per euro at 8:48 a.m. London time, after appreciating to 78.78 pence yesterday, the strongest level since Oct. 13. The U.K. currency declined 0.2 percent to $1.6075, after falling to $1.5875 on Oct. 15, the lowest since November.

The pound has climbed 7.1 percent over the past year, the second-best performer among 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes, as investors bet the BOE was moving closer to raising interest rates.

http://www.bloomberg.com/news/2014-10-22/u-k-pound-little-changed-as-investors-await-boe-meeting-minutes.html

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